Thursday, April 14, 2011


OnagoruwaTHURSDAY, 14 APRIL 2011 00:00 BY ROSELINE OKERE THE Bureau of Public Enterprises (BPE) has identified 100 million Nigerians as having no access to electricity while 50 million people receive low or irregular supply.

To provide regular power supply to Nigerians, BPE said that over $35 billion (N5.5 trillion) of investments would be required in the nex
t 10 years.
Speaking at a workshop on electric power sector for business editors yesterday in Lagos, BPE’s Director General, Bolanle Onagoruwa, lamented that 30 per cent of electricity bills were not collected from Power Holding Company of Nigeria (PHCN)’s customers.
According to her, the ambition of the Federal Government is to meet the Vision 20: 2020 target of 40, 000 mega watts which require investment in power generating capacity alone    of at least $3.5 billion a year for thenext 10 years.
“In addition, large investments will also have to be made in power transmission and distribution.  Since the Federal Government cannot accommodate the cost alone, there is the need to incentivise the private sector to partner the Federal Government in this endeavour,” she added.
Onagoruwa said in designing the model for the selection of the preferred bidder for Nigeria’s distribution companies, BPE had taken into consideration the fact that the existing Aggregate Technical, Commercial and Collection (ATC&C) losses sustained by the various distribution companies were estimated at between 40 and 50 per cent of the power wheeled to them.
This level of losses, she said, was unsustainable and if not halted, would continue to make the Nigerian Electricity Supply Industry (NESI) absolutely unviable for full and unsubsidized private sector participation.
She disclosed that the World Bank had given the BPE a ‘No Objection’ to re-engage British Power International as its advisers for the engagement of the management contractors.
The BPE boss said that the bureau would soon commence a process for the engagement of the management contractor. “There is already a shortlist of three bidders from the original exercise and we are likely to invite others,” he said.
She added that the main reason for setting up the bulk trader was to ensure an orderly transition for the establishment of a competitive market in the electric power sector.
The bulk trader, Onagoruwa hinted, would take over responsibility for the Independent Power Project (IPP) contracts from PHCN as a step in the implementation of the Electric Power Sector Reform Act, which provides that PHCN’s assets and liabilities will be transferred to successor companies.
Onagoruwa stated that the World Bank had provided the Partial Risk Guarantee (PRG), which is expected to provide credit support for the bulk trader as it enters into PPAs with successor generation companies and IPPs.
She added that the World Bank’s PRGs were also being put in place for existing and proposed gas supply agreements through the Nigerian Electricity and Gas Improvement Programme (NEGIP). “For the electricity sector PRGs, applications have already been forwarded to the World Bank in respect of some IPPs, and are being processed. However, the bulk trader first has to be operational and then licensed by NERC before any new Power Purchase Agreements (PPAs) can be signed and PRGs provided by the World Bank,” she said.
Onagoruwa assured of the Federal Government’s commitment to ensuring that the labour unions are carried along in the process of privatisation of the power sector and that adequate provision was made for the entitlements of workers. “Due consideration has been given to the demands of the unions, and we are optimistic that negotiations will commence in the not too distant future,” she added.



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